The Pound sterling collapses to its 37 year lows, the U.K. is facing inflation, recession and an energy crisis mixed with parabolic debt levels.

The Pound sterling (GBP) touched its 37 year low at 1.13 on the 16th September 16th 2022 (Chart 1), last visiting the collapsed value in 1985 as the U.K. was amidst a currency crisis.   The U.K. economy once again is facing a double whammy of stagnation and inflation with something more brutal on top, its Debt-to-GDP (yellow line overlay).  Debt levels are now at an eye watering 2.3 Trillion, when you consider  that in 1985 it was 156 Billion, in layman's terms, the holders of U.K. bonds will ask for high rates in lieu of possible bond default/s and stagflation, indicating that we all could be in for a very serious global inflation laced recession.  These higher bowering costs will all be past onto the taxpayer.

Very much like most countries, stuck between a rock and hard place when inflation and high debt levels, mixed with supply chain issues and energy costs going upward.  Central Banks so called 'tool box' to which they touted to offset deflation and recessions, will be left with the most blunt of tools, yet the most affective, by increasing interest rates to bring down inflation.

It is essentially unknown territory ala a redux of stagflation that occurred from the 1970's, yet with a global economy swimming in debt.